May-to-December Clients

Husband and wives who are many years apart face unique financial-planning issues and challenges.

By Lucretia DiSanto Jones

For today’s advisor, it is not uncommon to encounter couples who are years apart in age. These May-December relationships can present unique financial-planning issues and challenges.

“Your client can say, ‘life insurance is how I’m going to provide that half million over here to my older children.’”—Glenn Jagodzinske

MDRT-producer Glenn R. Jagodzinske, CLU, LUTCF, ChFC, a New York Life agent in Topeka, Kan., understands these clients and their issues. The national committeeman for the state of Kansas and a member of NAIFA-Topeka, Jagodzinske has developed a client base over the past 15 years that consists of middle-aged and older people. When asked to step back and consider a sample couple, say a 60s-ish husband with a wife about 20 years younger, Jagodzinske can easily think of financial-planning issues that will require discussion and action.

The first step is always clear, however: Various forms of protection must be put in place. “There are certainly implications here with the difference in age. Clearly adequate life insurance is needed for protection and certainly long-term care insurance, which is a big concern,” he says.

Furthermore, says Jagodzinske, these clients must have their paperwork ducks in a row, especially if it is a second marriage with children from a first marriage. “They must check all beneficiaries and all wills and trusts. They have to make sure beneficiaries are up to date and that they have fulfilled the obligations to them and have done the things they want to do for this [current] family. It is possible that actuarially, this family will survive him by 20 years. Also, any obligations or wishes that he has for his first family, if there was one,” must be addressed.

Long-term care
Jagodzinske says that couples with many years between them must also have a solid LTCI policy in place. “A great majority of long-term care now is taking place in the home, not in nursing homes. The issues of assisted living, issues of home-health care, issues of community-based care are really big for a couple like this. You can envision not too far down the road a lady in her 60s and a man in his 80s. The younger wife is certainly going to be most likely the caretaker—and maybe for many years. Good, solid LTCI is needed, so that the financial worry is taken away,” he says.

LTCI is important for the younger spouse, also. “Someone younger can have a stroke or have early onset of Alzheimer’s or can be in a bad car accident. Long-term care insurance is important for both spouses. At 60-plus and mid-40s, they’re at a good age to consider it and put it in place,” he says.

What about us?
For couples like this, life insurance can take care of older children from previous marriages, if there are any. “I think that preparation is the key,” says Jagodzinske. “Clients may ask themselves, ‘How am I going to treat this right? How do I make sure that my new family is well taken care of and that I haven’t disowned my older children?”

If health concerns don’t muck up the application process, life insurance can be the answer, says Jagodzinske. “Your client can say, ‘life insurance is how I’m going to provide that half million over here to my older children.’”

Talk it over
When older children are involved, says Jagodzinske, communication is critical. It is not always forthcoming, though. “How much do we communicate to our grown-up children? How much do we tell them what we have or what we’re doing with it? That kind of discussion doesn’t happen in many families. But I’m with the group that says sitting down and having an informational meeting and letting people know is probably better than people being in the dark. When people don’t know, all kinds of friction and enmity can happen,” he says.

Besides, Jagodzinske explains, the “protection” phase will probably work a whole lot better than trying to figure out how to divide the savings, the investments, the stocks or the bonds. “If it’s possible, life insurance resolves a lot of these issues,” he says.